Health care ruling could mean coverage for hundreds of thousands of uninsured Arizonans

But Gov. Jan Brewer, lawmakers, would have to agree Medicaid expansion's terms

Arizona Gov. Jan Brewer and state lawmakers face a key decision in the wake of the U.S. Supreme Court upholding the federal health-care law's broad expansion of Medicaid: They can extend health insurance to more than 300,000 low-income Arizonans at a cost of $250 million for the first year or opt out of the largest expansion in Medicaid's nearly 50-year history.

Brewer is expected to confer with health-care officials in the coming weeks before deciding.

But on Thursday, the Republican governor and GOP legislative leaders continued to call for repeal of the law and urged voters to oust those who support it.

"If nothing else, today's decision officially sets the stakes for the November election," Brewer said in a statement. "It is now up to the American people to save our country from the fiscal and regulatory nightmare known as Obamacare."

Arizona was among 26 states that sued the federal government to block the Affordable Care Act, arguing that its Medicaid expansion was "unduly coercive" because it required states to expand or lose all their federal Medicaid funding. The state and federal governments share the cost of the program.

Thursday's ruling solves that problem by making the expansion voluntary, so states that decide to maintain the status quo would not be penalized with losing existing Medicaid funds.

The makeup of the next Legislature won't be determined until November. But Brewer and current state lawmakers have eliminated more than 200,000 children and adults from the Arizona Health Care Cost Containment System, the state's Medicaid program, to help balance budget deficits.

Health-care advocates say the cuts have had devastating consequences. The cost of not extending Medicaid to more low-income families would be greater than the state's share of expanded coverage, they argue.

Even if Brewer and lawmakers agree to expand Medicaid, they say, it wouldn't take effect until Jan. 1, 2014. Meanwhile, the next 18 months will bring additional hardship.

"It's become an untenable situation for the whole health-care industry," said Tara McCollum Plese of the Arizona Association of Community Health Centers. "We have seen huge numbers of uninsured people. And the capacity to serve those people has been diminished."

How it would work

Under the health-care law, Medicaid would be extended to everyone earning up to 133 percent of the federal poverty level -- $25,390 for a family of three. Currently, Medicaid coverage varies by state and depends on whether someone is pregnant, disabled, working or has children.

State budget analysts estimate the extension will cover an additional 430,000 Arizonans by 2020, about 325,000 of them in the first year. They expect the state's cost for fiscal 2014, which includes the first six months of the law's implementation, to be $40 million.

In the U.S., the Medicaid expansion will insure an estimated 17 million more people. Medicaid now insures about 1.3 million Arizonans and roughly 56 million people nationwide.

Just under one-fifth of Arizonans are uninsured, according to recent studies.

For states that opt in, the federal government will pay a greater share than ever, covering up to 100 percent of the costs of insuring previously ineligible adults and children through 2016 and 90 percent by 2020.

If they agree to the Medicaid expansion terms, state lawmakers will need to pass legislation to change eligibility limits. Among the newly insured would be 35,000 children 6 to 18 years old now eligible at up to 100 percent of the poverty level.

The new law, however, will not require Arizona to lift an enrollment freeze on its children's health-insurance program, KidsCare, which previously served all children in families with incomes up to 200 percent of the poverty level.

State lawmakers froze the program in January 2010, and AHCCCS says 105,000 eligible children are on a waiting list.

A new version of KidsCare, paid for by three hospital systems and the federal government, will insure an additional 21,700 children through 2013.

Cost of health care vs. uninsured

Health-care advocates say it makes financial sense to expand Medicaid, in part because taxpayers end up paying for the uninsured if they become hospitalized or disabled.

Jocelyn Guyer, co-executive director at Georgetown University's Center for Children and Families, said the increased federal match makes the Medicaid expansion a good deal for states.

Those who have health insurance are more likely to keep chronic health conditions under control and stave off disability and hospital admissions.

Dana Wolfe Naimark, CEO of the Children's Action Alliance, said the benefits of providing health care for Arizona's children cannot be overstated.

AHCCCS covers more than 600,000 Arizona kids and is "respected as a national model that has among the highest quality and lowest costs of any state," she said.

But Republicans and some business leaders argue that the long-term costs are unpredictable and could prove untenable .

House Speaker Andy Tobin, R-Paulden, said it would be a mistake to expand AHCCCS, even with additional federal funding.

"I don't see us going along with the expansion if it's not mandated," Tobin said. "It's an ever-expanding cost, so it continues to put pressure on the state budget when we're barely recovering as it is."

Hard choices, key numbers

Arizona Gov. Jan Brewer and state legislators must decide whether, under the health-care law, to accept more Medicaid funding to expand coverage for the poor. The state, along with the federal government, would have to pay more.